Beware of the Company You Keep

You may have seen the recent studies that indicate that people who are friends with overweight people tend to be overweight themselves. This is often because you do what your friends do. If your friends eat a lot of fast food and do nothing but sedentary activities, chances are that is what you will do, too. The same is true in personal finance. If you are friends with spendy people, you will be more likely to spend a lot of money just to fit in. If they go to movies, restaurants, and clubs all the time, chances are you will, too. If they hang out at the mall and buy expensive clothes, chances are that you and your money will follow.

I completely agree with you…and what you find when you take this approach is that you don’t end up with a large number of close friends because it really isn’t that easy to find people that live within their means and aren’t trying to impress others. (at least here in Southern California) The older I get, this becomes even more important. I am no longer interested in having to impress anyone, and I don’t want friends that like me because of what I own. If they even pay attention to what brand of purse I carry, they aren’t a good match for me.

Sometimes it pays to live the simple life and be semi-hermits (or in hubby’s case a hermit)! I go to a Bible study at a friends house, but other than that I don’t go visiting at all. I love my house and its reasonable mortgage for the space we have. My husband built the house with help from friends so it cost us about $110,000-120,000 to build (land given to him by his father), but we have to insure it for $500,000 because of all the special features hubby managed to install by repurposing things like marble and granite from a school in town that was torn down, and other things that make a truly unique home. The Jones’ would probably envy us LOL! My most frequent visitor is my son with the same attitude about money that we do and that helps alot.

There is also a flip side to this. If you spend time with those who are richer than you, you’ll also hopefully develop some of their personal finance habits – which may help educate you or give you access to better/more lucrative investing opportunities.